[photopress:IBM_in_China_the_sun_is_red.jpg,full,alignright]According to state newspaper Southern Metropolitan News IBM has confirmed that a previous first-level distributor in Guangzhou has filed a lawsuit against the company over a dispute involving an alleged ‘fake sales’ scheme.
The company has sued IBM for ‘using tactics like providing fake business information and fake end buyer information to induce the plaintiff to continuously keep stock of IBM products that could not be sold.’ The plaintiff is seeking compensation of RMB13.5 million ($1.75 million.)
Is there a case? Possibly. Probably. The pressure starts at the top. This, everyone is told, is the sales target. These are the figures we must reach so that the quarterly financials will look good. This is passed down to the marketing department and eventually to the salespeople who want to keep their jobs and earn some extra commission.
Southern Metropolitan News said IBM sales personnel often create fake orders from customers and tell distributors to stock these products. These sale volumes are added to the salesperson’s business performance as well as the company’s quarterly and yearly performance results.
This is going a bit far. What is more probable is that future orders are being eased back from one quarter to the previous one to make the figures look good.
A company has to keep a very, very tight control on its sales staff if is not to indulge in this well-known and pernicious habit. (If you want a good deal when buying a computer wait for the last week in the quarter and make an offer. Or better yet, ask for a demonstration and then demur. You will be amazed what discounts can be swung over from publicity to your distinct advantage.)
IBM official Gary Zhou indirectly denied the accusation, saying that before IBM hires any salesperson, that person signs an agreement promising not to hurt customers’ interests and undergoes a strict training program.
That sounds something less than a totally enthusiastic denial.
Someone who has worked at IBM said,’It’s quite normal for IT companies, both software developers and hardware manufacturers, to make up false sales volumes by letting distributors keep stock of products based on fake orders. IBM is one of the cruelest companies in pressing distributors, but not the only one. Dell and Oracle also use the same tricks.’ Sounds a bit strong, a bit over the top. But, at a bet, IBM will settle.
Source: Interfax
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